Madam Speaker, congratulations on your new appointment as Assistant Deputy Chairman of Committees of the Whole. I will be sharing my time with the hon. member for Richmond who is about to make his maiden speech.
I rise on behalf of the people of Surrey Central to participate in the debate on Bill C-8, an act to establish the financial consumer agency of Canada and to amend certain acts in relation to financial institutions.
I am proud to do this because the financial services sector is the largest sector in the British Columbia economy. Our largest banks employ about 26,000 people in British Columbia. Banks in Canada employ about a quarter million people directly and contribute approximately $80 million a year to charities in Canada and about $4.5 billion annually in taxes to our provincial and federal governments.
Despite the contributions that the banks and other financial institutions make, they are a sound foundation as the backbone of our economy. Our banks, trust companies, credit unions, mutual funds, insurance companies and others are very important to our economy.
The bill proposes to address the calls to modernize Canada's financial services industry. Canadian consumers of financial services have demanded a more competitive environment while our banks have been seeking approval to merge and to have more flexibility in the way they structure their operations.
The bill is an attempt to catch up to other countries that have made changes long ago to their financial services industry. The Liberal government has been dragging its feet on this matter for about seven years. This is too bad because our financial institutions must have the ability to make long term plans for the future. Once it is passed into law, we hope the bill will give our banks the opportunity they need to perform long term planning. I doubt that will happen because of the five year sunset clause in the bill.
My colleague from Prince George—Bulkley Valley has a great deal of experience and has been of great assistance to the official opposition working on our financial services policy group. The official opposition wrote a banking report in November 1998 entitled “Competition: Choice You Can Bank On”. The report forms the backbone of our financial services policy. It is a very good and detailed report.
The bill addresses some of the changes we on this side of the House have been pressing the government to enact. The official opposition has been carrying the flashlight to show the Liberals their darkness. After ridiculing our policies they have been stealing them from time to time. We encourage them to steal more of our policies, but unfortunately they do not get them right.
I understand that my colleague on the Canadian Alliance financial services policy group will be pursuing the government with amendments to the bill at committee stage. We hope the government will show some respect for what we propose.
We recognize that a strong financial services industry is essential to Canada's economic well-being. This means we need strong banks, insurance companies and other financial institutions. We need to create an environment for our financial institutions to flourish domestically and have the ability to take advantage of opportunities in the global economy.
Canada has one of the safest financial services systems in the world. We urge the government to ensure that these consumer benefits continue and not be changed or lost.
Outside the House critics of the bill are saying that in the past five years there have been many changes to the world financial system. The bill has been left behind. The bill used to be Bill C-38 which died on the order paper. It does not go far enough to bring our banks up to date with what is going on in the world.
International changes since 1996 are not reflected in the bill that is largely the same as what the Liberals introduced in 1996 but allowed to die on the order paper. They have been trying to pass the bill for far too long. It is out of date in many ways.
There are some who say that the bill is too little too late for our banks and that it will not help to strengthen the performance and competitiveness of our banks at home and abroad. They have already lost ground and they will not be able to make up those lost yards.
Other countries are well ahead of Canada. The United States has allowed its banks to merge with insurance companies. The Liberals insist on leaving it to their finance minister to decide what mergers can go ahead and which cannot.
By lowering the amount of money required to open a bank, we hope that the legislation will allow more banks to be set up in rural areas of Canada. The smaller the capital the more encouragement for institutions to jump into it..
The bill should enhance consumer choice by allowing insurance companies and mutual fund firms to use bank cheque clearing systems. If the banks take over the auto leasing and insurance industries they may hurt our economy since a significant amount of jobs are created by small businesses like car dealerships and independent insurance companies. The further entry of banks into the insurance and auto leasing markets should only be allowed if major auto financing and insurance companies have access to the Canadian Payments Association which they have been requesting. Banks must not have a competitive advantage over auto leasing and insurance companies. There must be a level playing field for all competitors within a given market.
The Canadian Alliance supports the creation of a holding company structure where banks will be able to remove some of their non-banking operations, such as credit card businesses from bank regulations, by establishing separately regulated holding companies. This new structure would allow our banks to compete more effectively against foreign non-bank competitors.
We support increased access to the payments system so that life insurance companies, money market mutual funds and securities dealers will be allowed access to increases in consumer choice.
We support expanding the role of credit unions. I can say that because for about three years, before becoming a member of parliament, I was a director of the second largest credit union in Canada. I saw the environment from the inside. I know that the credit unions are not getting the same support as the financial institutions. They are not only consumer and community oriented, but they also have a good network of branches that help people at the community level.
We are disappointed that this measure is not included in Bill C-8 despite the recommendation in the MacKay report to allow for it. We believe that the government has failed consumers since this measure was seen to be a key point in increasing competition and benefiting consumers of retail banking, that is by the credit unions.
We are concerned about the measures in the bill that would regulate access to financial services. We are concerned about regulating branch closures. This kind of initiative by the Liberals is unnecessary red tape. The banking industry already considers it good business practice to properly justify any bank closures and to give fair warning to the communities or their customers.
The bill also proposes a financial consumer agency responsible to the finance minister. These bureaucratic positions would be filled with Liberal appointments, like Mr. Lou Sekora, just as many other failed Liberal candidates have been given patronage plum jobs by the Liberals. We would support an independent ombudsman selected by the House with penalty enforcement powers and the ability to make binding directives when necessary.
In conclusion, we hope the Liberals will pay considerable attention and take our amendments seriously. We hope they will listen to the witnesses who will be appearing before the committee. We will support the bill with amendments, particularly in the areas of credit unions establishing co-operatively held banks; the tremendous power given to the Minister of Finance; the bureaucracy created by the new commissioner of the FCAC; and the regulation that demands banks to provide money losing personal accounts.